Barclays was right to sack its chief executive – but it did it for the wrong reason.

With its abrupt ejection of Antony Jenkins, Barclays became the third of Europe’s four leading global investment banks to dismiss its chief executive this year.

The move against Jenkins was led by John McFarlane, who has been chairman for three months, and an old City hand, deputy chairman Sir Michael Rake (The Wall Street Journal reports today that Rake himself will leave the bank to become chairman of payments processing company Worldpay).

But the real reason for all these sackings is shareholder dissatisfaction with lagging share prices, which have persisted for years despite the banks' continuous assertions that they are getting things right. Deutsche Bank trades at 50% of book value, Barclays at 70% and Credit Suisse at 96% (a bit better due to its wealth management business).

Sure, they have all tried very hard to get things right. But the lingering problem behind the poor results has been the now-obsolete structure of their "systemically important financial institutions" (Sifis) that continue to operate large, capital-intensive investment banking franchises inside holding companies that have become regulated public utilities.

The market is becoming increasingly sceptical of normalised earnings valuations based on the “inevitable” rebound of the capital markets business and “trust me” investor relations themes delivered by bank chief executives reluctant to abandon their global investment banking ambitions. It is understandable that chief executives do not wish to discontinue or resize their business units after having spent much of their careers overseeing the capital investment and management efforts needed to build them up. But sunk costs are sunk costs.

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As the graph above shows, equity investors are making it clear to bank boards that institutions that can prove that their capital markets businesses can generate returns at, or above, their cost of equity (see Quadrant A of the graph) will be rewarded with valuation premiums over book value. JP Morgan Chase and Goldman Sachs are both capital markets leaders that have been able to deliver satisfactory performance despite the regulatory and macroeconomic challenges of the past five years.

Banks that select strategic courses with the potential to deliver reasonable returns in the near future (Quadrant B), despite recently reporting performance below the cost of capital, are also worthy of premium valuations. Morgan Stanley has chosen to expand its US wealth management business. Credit Suisse and UBS are resizing their investment banks to support a strategic emphasis on global asset management. And HSBC is using its strong regional positioning in the developing market to deliver transaction and operating services, and pursue capital markets transactions as the opportunity arises.

By comparison, Quadrant C contains banks that have made insufficient progress in improving their returns on investment (Barclays, Citigroup, Bank of America and BNP Paribas). These institutions have remained committed to the outdated notions of "big balance sheet banking", "national champions" and the maintenance of a "global footprint." These businesses trade at sharp price-to-book discounts.

Since the crisis in 2008, changes in top leadership of the global investment banks have been common – nine of the top 12 banks have replaced their chief executives since then (four of them more than once). Even so, what has been rare among these banks (especially among those in Quadrant C) is a real change in their business models to adapt to the reality of regulatory changes, rather than just cutting costs as much as possible and tweaking and trimming here and there.

The trajectory of Jenkins at Barclays has echoes of what happened at Citi after 2012. A new chairman, John O'Neill, a retail banking veteran whose claim to fame was turning the Bank of Hawaii around within four years, quickly orchestrated the surprise replacement of chief executive Vikram Pandit by Michael Corbat, a long-serving Citi executive in charge of attempting to liquidate Citi's bad asset pile in Citi Holdings.

O'Neill promised a strategic review (as McFarlane has done), but Citi has not engaged in any serious retreat from investment banking. Three years later, as at Barclays after Jenkins was appointed, Citi's stock flattened out after a honeymoon pick-up, and is still stuck where it was in mid-2013. Unlike Jenkins, however, Corbat is still in his job.

The markets know that a strategy based on combining full service banking and global capital market proficiency is extremely hard to execute. A few institutions (JP Morgan, perhaps) may be able to pull it off, but for most it has been a management and balance sheet nightmare, even before Basel III, Dodd Frank and all the rest of the regulatory tightening and legal issues appeared. Some, for example UBS and BNP Paribas, have reduced investment banking below critical levels, but the rest are still in denial.

Barclays has made a big step by replacing Jenkins in the middle of his efforts to turn things around. It appears that the main reason for the change was that what he was doing was taking too long, and the markets no longer believed his efforts would change anything, not that the basic strategy was wrong. McFarlane must convince the market that he can deliver strategy that will yield better results, or he too will be out.

Many other global investment banks are in the same position, sticking to the old strategy while working to improve execution. But the real fault is in the strategy itself, not the execution, however slow that has been. These banks should be questioning their own belief that retail and investment banking still go together, and studying what GE did this year, biting the bullet and announcing that instead of fussing endlessly with piecemeal rearrangement of GE Capital, its Sifi-designated financial arm, it was going to sell the unit en bloc.

So far there is no sign that they are.

• Roy C Smith is a finance professor at NYU Stern School of Business and former partner at Goldman Sachs. Brad Hintz is an adjunct finance professor at NYU Stern and former CFO at Lehman Brothers and top-ranked banks analyst with Sanford Bernstein